Department Stores Doing Big Business
By George Anderson
The people who work at chains such as Macy’s, J.C. Penney, Nordstrom, Neiman Marcus and Boscov’s would like everyone to know that, despite rumors to the contrary, the department store business is doing just fine, thank you.
Jim Sluzewski, a spokesperson for Macy’s parent Federated Department Stores, told the Albany Times Union, “When people say to me, ‘Why aren’t people shopping in department stores anymore?’ I tell them our sales this year will be $27 billion, which is a lot of shopping in department stores.”
Federated chief executive Terry Lundgren is counting on his strategy of making Macy’s a national retail brand to help elevate the department store’s business to new heights.
J.C. Penney spokesperson Quinton Crenshaw said the chain continues to grow sales across its online, catalog and physical store businesses. Penney expects to open 27 additional freestanding and mall stores this year.
Penney’s strategy has been to focus on fashion and home furnishings combining national and proprietary brands to set itself apart from other department stores and discounters.
“They position us to be the preferred shopping choice of Middle America,” said Mr. Crenshaw.
Ken Lakin, chairman and chief executive of the family-owned Boscov’s, said his company and others in the department store sector face the greatest competitive challenge from a nationally branded Macy’s.
“They’re probably the best merchants in the country today, if not the world,” he said.
Mr. Lakin also sees continued competition from discounters such as Wal-Mart but he indicates that threat may be less of a factor in his business’ performance than how others in the department store group perform. He also suggested that Wal-Mart’s competitors have learned valuable lessons of survival having had to go up against the retailing giant every day.
Using a jungle analogy, Mr. Lakin said, “It’s the 900-pound gorilla (Wal-Mart) that could become extinct. The spider monkeys and chimpanzees (other retailers) are doing fine.”
Moderator’s Comment: What need(s) do department stores fill for American consumers today? Where do you see opportunities
for the channel to grow? Which banner is best positioned for growth and why? –
George Anderson – Moderator